Casino stresses underlying growth
was not enough to offset the ongoing negative impact of exchange
rates in the first half, the retailer announced yesterday.
A recovery in international sales, coupled with further growth in its domestic market, helped French supermarket group Casino post good organic growth in the first half - but exchange rates continued to impact reported results.
Like so many international retailers, Casino has paid the price of its foreign expansion in recent quarters with worsening exchange rates in Asia and Latin America taking their toll.
The first half of the current year is no exception, with total sales dropping 0.2 per cent to €11 billion despite a 4.7 per cent increase in domestic sales to €8.7 billion. International sales of €2.3 billion were 15.5 per cent lower than in the same period a year earlier because of the exchange rate decline.
But Casino stressed that these results did not reflect the renewed dynamism of its overseas operations, with organic growth at the international business reaching 6.6 per cent during the half.
French sales were boosted by solid performances at the Géant hypermarket arm, whose sales rose by 3.8 per cent to €3.4 billion, and by the group's various convenience store operations, which posted a 2.5 per cent increase to €3.2 billion.
But the main driver of growth in France was the discount format Leader Price, which grew sales by 9.2 per cent to €1.9 billion during the quarter. This format is currently being developed rapidly by Casino, with 27 new stores opened during the six month period.
Within the convenience store division, Casino said that it had seen a 2.2 per cent increase in sales from Monoprix, which operates mainly city centre supermarkets, and the superettes unit (Petit Casino, EcoService banners).
The advances in international organic growth, meanwhile, were driven by good performances in the US and Latin America (apart from Argentina) and by the recovery of sales from Casino's stores in Taiwan and Poland.
Sales in Poland had dropped by 17.5 per cent during the first quarter of the year, and while second quarter turnover was still lower than the same period in the previous year the decline was a more reasonable 0.3 per cent. Casino said this was due to its rapid restructuring of its Polish business over the three months, which essentially involved revamping the product mix to favour food over non-food products.
In Taiwan, first quarter sales were down 9 per cent, a decline which was reduced to 1.2 per cent in the second quarter, while the first quarter drop of 1.2 per cent in Thailand was converted into a 1.9 per cent gain in the second quarter thanks to a new policy which again stressed the importance of food over non-food items.
Although reported sales continued to be hit by exchange rates, there were good gains in Latin American sales as well, with Uruguayan stores posting a 9.5 per cent increase for the half and Venezuelan sales increasing 13.9 per cent. Only Argentina failed to improve, with sales dropping 2.7 per cent for the half as consumer spending continues to fall as a result of recession there.
Laurus decline continues
Meanwhile, Casino's Dutch unit Laurus reported a 7.6 per cent decline compared to the previous year with sales falling to €2.3 billion, mainly due to the sale of a number of under-performing stores.
Recession is also biting in the Netherlands, reflected by the increase in sales by the discount banner Edah, which outperformed the other Laurus units, Super De Boer and Konmar. On a like-for-like basis, Edah's sales were 3.2 per cent higher while Super De Boer's were 0.6 per cent lower and Konmar's 7.6 per cent below the previous year.
Laurus said it was restructuring the Konmar business, converting the medium-sized Konmar Supermarkets into Edah and Super De Boer banners in the second half of 2003 and in 2004 in order to focus on the larger superstores which are performing well.
